BMC cracks down on redevelopment project delays

MUMBAI: Continuing its crackdown on sloppy work, the BMC has outlined a policy limiting the maximum redevelopment project time for its properties to four years and slapping penalties on developers unable to meet deadlines.

In a circular on Monday, the estates department listed out seven steps to be taken against developers if they slip up, including cancellation of proposals for delays in the planning stage and fines if construction is not completed on time.

Last week, the BMC, in an unprecedented action, had slapped penalties over Rs 90 lakh on sub-engineers of its road department for not filling up potholes promptly this monsoon.

Among the steps listed on Monday (see box), the BMC has revised its charges for a developer from Rs 1,000 to Rs 5 lakh every year for revalidation of the letter of intent ( LOI) if he fails to get a commencement certificate (CC) within a year. For further delay, a showcause notice will be issued for cancellation of the project. It will be implemented with retrospective effect from 2010.

The BMC has taken a lenient view on delays resulting from litigation, but ordered a stiff 18% interest levy on the remaining capitalized value (the amount the developer has to pay for the sale component in a redevelopment project) and an additional Rs 1 lakh per month for any extension a builder might seek in a smoothly progressing project.

The new policy also links a project's deadline to the plot area. Redevelopment on a plot up to 4,000 sq m has to be completed within three years and those that must in four years.

"The delay in completion of projects embarrasses the BMC as rehabilitation of tenants cannot be done on time. Moreover, as time passes, the value of the flats in the sale component of the project increases for the builder, but leads to delay in paying up the capitalized value that he owes to the BMC. This policy will ensure that the capitalized value is paid on time and as per schedule," said a civic official.

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